Starting up a social media program for your business can be daunting. You may have heard that “it’s the least expensive advertising you’ll do” or “it’s practically free, so why not do it?”

 

If you’re looking at it as nothing more than setting up a Facebook and Twitter site, you may be led to believe that it is a very low-cost marketing solution. Once you start looking deeper and adding up the costs, you may find that it’s way more than you’d anticipate.

 

With that said, the benefits of social media are well worth the cost, if done correctly. An infographic was recently published that covers this very topic – the real cost of social media and the benefits a company can gain from using social media. I’d like to break it down and discuss the various points. While this data appears to be geared toward bigger companies, I can offer some additional information and tips on how to make it more affordable for smaller to mid-sized companies.

 

Cost

When considering starting a social media program, you may not be thinking of all of the following factors:

 

 

 

What can all of this cost? Let’s take a look at the next section to explore potential costs:

 

 

 

Before you reach for the paper bag, consider the following with regard to actual cost:

  • Small to mid-size  businesses will incur less of a cost when it comes to a Community Manager or Social Media Strategist. If you handle social media internally, you can figure in the hourly cost of the people you will use (or hire) to do this for you. Similarly, if you outsource, there are companies that can handle your social media for less.
  • When starting a social media initiative, you won’t do everything all at once; make a solid plan as to where you will start, and how you will build your social media presence over time. These costs can then be spread out over the course of your social media planning.

Benefits

Let’s look at the potential benefits of social media. Emarketers surveyed US marketers to find out how they believe social media helps their brand. The chart below shows the responses by percentage:

 

 

 

 

Not surprisingly, customer engagement was at the top of the list, followed by direct customer communications. Some of the others that are worth noting:

 

Speed of feedback: looking to offer a new product? Want to know what promotions will drive more customers into your store? With social media, you have the opportunity to ask your customers directly and get feedback quicker than you would with traditional marketing efforts.

 While not mentioned directly in this infographic, monitoring social media will give you customer feedback that   your customers may not share directly with you in feedback surveys. Monitoring social media is extremely valuable to capture this type of information, and is an integral part of any social media initiative.

 

Learn customer preferences: through social media, you can learn what your customers like. Are you running a promotion that received very little interaction (clicks to the sale item, low impressions, no one sharing the feed with friends/family)? Your customers may be telling you something. With social media, you can easily try different things to see what your customers respond best to.

Through monitoring of your social media sites, you can also learn more about your customers. You may think  your core customer base is a certain demographic, but will be surprised to find that the people who are supporting your brand online are in a completely different demographic, or that you have more customers that you realized in a particular demographic. This gives you a chance to market to them in a way that will bring them in as well. Spending some time with social media analytics is a great benefit!

 

Reach: I’m surprised this is near the bottom of the responses, yet it still has 40% of marketers that see this as a benefit. For small to mid size companies, reach is a wonderful benefit of social media, both directly and indirectly. Directly, of course, by building up your social media sites so people are aware of your company, and encouraging your customers to spread the word to friends and family.

The other aspect of this relates to online visibility; by having social media sites and linking them to your company website, and by engaging in other social media tasks, such as listing your business with search engines, and claiming your company’s listing on feedback sites, you will slowly build a stronger online presence. When people do online searches for a product you sell, your company will start to come up sooner in the search engine results. Social media optimization is the new SEO, and this benefit should not be overlooked.

 

Customer service: this is last on the list right now, but I anticipate it will move up quite a bit over the next year. Customers want information and want to be helped quickly, and they are starting to turn to social media more and more. Personally, when I have issues with my internet, I now turn to the company’s Twitter account for updates on outages. Why? First of all, when I call, I have to walk through a maze of options and a tutorial on how to troubleshoot the connection on my own (this is something I always do first, so by the time I call, I don’t need to hear this). By the time I get to hear an update on an outage, I’m a bit older and more frustrated.

The company has not quite configured their website for mobile devices yet, so going to their website is not an option from my Blackberry. I now know that I can go directly to their Twitter page and get the latest updates. And, if there is nothing posted yet, I can send a Tweet to ask and usually get a response fairly quickly.

 

As social media grows, I believe that more customers will turn to social media for basic customer service issues.

 

Fun statistics

Now that you’ve started thinking about social media costs and benefits, and how that might fit with your company’s marketing budget, I’ll leave you with some fun statistics. Take a look at the rest of the infographic to see the value of a Facebook or Twitter follower, and some case studies on the effectiveness of social media: